Journal of Economics and Management Volume 19, No. 1 March, 2023

Rethinking the Growth-Energy Consumption Nexus: What Evidence Exists in Sub-Saharan Africa?

Obukohwo Oba Efayena

Department of Economics, University of Nigeria, Nigeria

Enoh Hilda Olele

Department of Economics, Delta State University, Nigeria

Patricia Ngozi Buzugbe

Department of General Studies and Humanities, Delta State Polytechnic, Nigeria

Abstract

With renewed emphasis on greener economies in recent times, the need to re-evaluate energy demand and consumption as it relates to the growth trajectory of an economy cannot be overemphasized. This study investigates the growth-energy consumption nexus in 10 emerging economies in Africa given the huge energy demand-supply gap in the continent, by employing energy consumption data between 1980 and 2020 alongside RGDPPC (real GDP per capita) in a nonlinear econometric framework. The panel autoregressive distributed lag (ARDL)/pooled mean group (PMG) technique establishes a positive effect of energy consumption on economic growth. The study also found that a long-run relationship as well as a bidirectional causality exist between energy consumption and economic growth in Sub-Saharan Africa. Overall, there is strong evidence that energy consumption has growth-stimulating properties, which thus prompted the study to recommend that efforts should be rigorously exerted in the energy sector in order to maximize the growth-energy consumption framework.

Keywords：Growth, Energy, Africa, Consumption

JEL Classifications：C23, Q43, O40.

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